Professionally, O'Duffy became the second Commissioner of the Garda Síochána, the police force of the new Irish state, after the resignation of Michael Staines. In his political life O'Duffy had been a member of early Sinn Féin, founded by Arthur Griffith. He was elected as a Teachta Dála (TD) for his home county of Monaghan during the 1921 election. After a split in 1923 he became associated with Cumann na nGaedheal and led the security organisation known as the Army Comrades Association (Blueshirts). After the merger of various pro-Treaty factions under the banner of Fine Gael, O'Duffy was the party leader for a short time.

In March 1921 he was made commander of the IRA's 2nd Northern Division. Following the Truce with the British in July 1921, he was sent to Belfast. Following the rioting known as Belfast's Bloody Sunday, he was given the task of liaising with the British to try to maintain the Truce and defend Catholic areas against attack.[5]

In September 1922, Minister for Home Affairs Kevin O'Higgins was experiencing indiscipline within the recently established Garda Síochána (police) and O'Duffy was appointed commissioner. O'Duffy was a fine organiser and has been given much of the credit for the emergence of a respected, non-political and unarmed police force. He insisted on a Catholic nationalist ethos to distinguish the gardaí from their RIC predecessors.[2]

"he [O'Duffy] was likely to be biased in his attitude because of past political affiliations".

The true reason, however, appears to have been the new government's discovery that in 1932, O'Duffy's was one of the voices urging W. T. Cosgrave to resort to a military coup rather than to turn over power to the incoming Fianna Fáil administration. O'Duffy refused the offer of another position of equivalent rank in the public service.

Ernest Blythe said many years later that the outgoing Government had become so alarmed by O'Duffy's conduct that had they returned to power they would have acted precisely as De Valera did.[6]

In July 1933 O'Duffy became leader of the Army Comrades Association, ostensibly set up to protect Cumann na nGaedheal public meetings, which had been disrupted under the slogan "No Free Speech for Traitors" by Irish Republican Army men newly confident after the elections. O'Duffy and many other conservative elements within the Irish Free State began to embrace fascist ideology, which was in vogue at that time. He immediately changed the name of this new movement to the National Guard. O'Duffy was an admirer of the Italian leader Benito Mussolini and his organisation adopted outward symbols of European fascism such as the straight-arm Roman salute and a distinctive blue uniform. It was not long before they became known as the Blueshirts.

In August 1933 a parade was planned by the Blueshirts in Dublin to commemorate Michael Collins and Arthur Griffith, both of whom had died 11 years earlier. This was a clear imitation of Mussolini's March on Rome and was widely perceived as such despite claims to the contrary. De Valera feared a similar coup d'état, and the parade was banned.

By September the Blueshirts were declared an illegal organisation. To circumvent this ban the movement once again adopted a new name, this time styling itself the League of Youth.

In September 1933 Cumann na nGaedheal, the Centre Party and the Blueshirt movement merged to form Fine Gael. O'Duffy, though not a TD, became the first leader, with former President of the Executive Council, (prime minister) W. T. Cosgrave serving as parliamentary leader. The National Guard, now rechristened the Young Ireland Association, was transformed from an illegal paramilitary group into the militant wing of a political party. However, meetings were often attacked by IRA members. O'Duffy proved a weak leader – he was a military leader rather than political, and he was temperamental. In September 1934 O'Duffy suddenly and unexpectedly resigned as leader of Fine Gael as his extreme views and poor judgement became an embarrassment to his party.[8] He went on to form the National Corporate Party.

The Blueshirt movement had begun to disintegrate also, so much so that by 1935 the organisation no longer existed. In June 1935 O'Duffy launched the unabashedly fascist National Corporate Party. The following year he organised an Irish Brigade to fight for Francisco Franco in the Spanish Civil War. Despite the declaration by the Irish Government that participation in the war was ill-advised and unsupported, 700 of O'Duffy's followers went to Spain to fight on Franco's side. Around 250 other Irishmen in Connolly Column went to fight for the Republicans' International Brigade. O'Duffy's men saw little fighting in Spain and were sent home by Franco, returning in June 1937.[9]

O'Duffy returned to Ireland from Spain in disarray. He retired from politics completely, apart from a low-level dalliance with Nazism. He is thought to have met with IRA figures and members of the German consulate in the summer of 1939. (See main article.) In the summer of 1943 O'Duffy approached the German Legation in Dublin with an offer to organise an Irish Volunteer Legion for use on the Russian Front. He explained his offer to the German ambassador as a wish to "save Europe from Bolshevism". He requested an aircraft to be sent from Germany so that he could conduct the necessary negotiations in Berlin. The offer was "not taken seriously".[10] By this time his health had begun to seriously deteriorate and he died on 30 November 1944, aged 52. He was buried in a state funeral. Following Requiem Mass in the Pro-Cathedral he was buried in Glasnevin Cemetery.

^Thomas Gunning, former secretary to O'Duffy, was also a "suspect" for Irish Military Intelligence (G2), having remained in Spain after the rest of the Irish volunteers for Franco departed under a cloud of recrimination. Gunning worked as a newspaper correspondent in Spain for a short time then made his way to Berlin, where he worked for the Propaganda Ministry until his death in 1940.